The Griffith University Art Museum (GUAM) in Brisbane's South Bank hosts visiting exhibitions and is separate to other campus galleries dedicated to showing student work.
Whether jobs will go as part of the proposed changes is still to be determined as part of a staff consultation process to be completed by next Friday.
The gallery currently has six staff as well as casual workers and volunteers.
Prominent Queensland artists including Victoria Reichelt and Tony Albert have gone online to voice their opposition to the closure.
The museum is an amazing cultural asset, Reichelt said, and its loss would diminish the university's reputation and reverberate for years as an extremely myopic decision.
The proposed closure would devastate staff and students as well as Queensland's visual arts community, she said in a statement on Instagram.
"This is completely unacceptable," replied artist Tony Albert.
The gallery space would be used by the film school, which has doubled in size over the past decade, and has to leave its leased studios in West End by mid-2024.
The proposal would not affect teaching or learning at the Queensland College of Art or the film school, promised Pro Vice Chancellor and head of South Bank campus Professor Scott Harrison, in a staff email.
"There is no other suitable space at Griffith for GUAM and taking space elsewhere would present an unfeasibly high economic cost to Griffith, particularly during the tough economic times the university is facing," he said.
The museum is also the custodian of a significant public art collection, which is displayed across the university's campuses, and which will also be on display at a new CBD campus to open in 2026.
"We remain committed to maintaining and displaying our art collection," the university said in a statement.
The art museum is currently showing photography by Chinese artists Pixy Liao and Lin Zhipeng in an exhibition titled Each, Other.
An exhibition by leading Indonesian art collective Taring Padi will go on display from the end of February, combined with a public art project to be developed with Indigenous art collective proppaNOW.
"If GUAM does close, we will work with any artists who have been booked for exhibitions next year to ensure they receive as much notice as possible of the changes and appropriate action taken with respect to their contracts," the university said.
The closure of GUAM would be a substantial blow not only to the art school but Queensland's arts ecosystem, according to the National Association of Visual Arts.
"The museum serves as a crucial training ground for arts professionals, curators, and artists in Brisbane," NAVA executive director Penelope Benton said in a statement.
Visitor numbers at the museum are low compared to other campus galleries, the university said.